Freeport Closer to Congo Deal: Report

Freeport McMoRan moves closer to signing a contract with the Democratic Republic of the Congo to start mining copper there.
By Scott Eden ,

NEW YORK (TheStreet) -- Freeport McMoRan (FCX) - Get Report moved one step closer today to mining an enormous seam of copper deep within the African rainforest.

The Democratic Republic of Congo's minister of mines told a World Bank official that he expects to sign a contract with Freeport "in a week or so," according to a report by

Reuters

Wednesday morning. Corporate executives, government officials and reporters were attending a mining conference in Cape Town, South Africa.

Freeport, a majority owner of the huge Tenke Fungurume copper project, has been trying for years to get the mine off the ground. Its future in many ways depends on Tenke: as Freeport's 20-year-old Grasberg property in Indonesia -- one of the biggest copper mines in the world -- slowly loses its yield, Freeport wants Tenke to pick up the slack. Tenke has been called the most significant undeveloped copper find on earth, in terms of size and quality.

But the company has found life difficult in the Congo, a country riven by civil war for the better part of 20 years. Last year, the government there challenged its burgeoning mining industry, canceling the concessions contracts it had struck with other companies for smaller mines, as if to threaten the larger and more important Tenke project.

Shares of Freeport,

which reported fourth-quarter results

two weeks ago, were trading Wednesday morning at $75.94, up 0.6%.

At one point, the Congolese government arrested several Freeport executives visiting the country and charged them with embezzlement and bribery. The employees were since acquitted, and Congo's leaders have backed away from their hard-line stance, no doubt wary of losing out completely on the profits Tenke will produce for them.

Freeport finished construction of the mining infrastructure at Tenke last summer. It has told investors to expect production to begin in the middle of 2010, a year behind schedule. Full capacity has been pegged at an annual 250 million pounds of copper and 18 million pounds of cobalt. In total, Freeport expects to produce 3.8 billion pounds of copper in 2010.

-- Written by Scott Eden in New York

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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.

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